The last gift you should give this year

Many of us are feeling cautious about our finances because our retirement plans are rising and falling with frightening unpredictability. The unstable housing market, high unemployment and gaping holes in government budgets add further fuel to our insecurities.

All of that uncertainty is translating to lower rates of charitable giving at a time when demand is soaring for basic services from nonprofit organizations. For example, at the Feeding America Food Bank in San Diego, there’s been a 35 percent increase in the number of people requesting food and a 15 percent decrease in contributions. Many of those people waiting in line are our unemployed neighbors. Most never imagined they’d be there.

Preliminary findings from our own survey research at the University of San Diego show how nonprofits across San Diego County are being impacted by current economic conditions. Not surprisingly, nearly 90 percent of nonprofits that have responded to the survey thus far reported that current economic conditions have had a negative impact on their charitable organizations. As a result, 45 percent have scaled back existing services while more than half report that demand for those services has increased.

At the same time, there has been a decline in individual, corporate and foundation giving. Complete findings from this research study will be available in January.

These findings, although preliminary, also reflect what is going on at the national level. According to the Giving USA Foundation, charitable giving in the United States during 2008 fell by the largest percentage in five decades. Initial figures for 2009 indicate an even steeper decline, with the nation’s largest charities anticipating a median drop in contributions of 9 percent this year.

News from a recent national survey of more than 2,200 nonprofits and foundations conducted by Guidestar echoes those findings. That survey found that from March to May 2009, more than a third of grantmakers distributed fewer dollars; more than half of all nonprofits saw a decrease in contributions and of those nonprofits reporting budget cuts, most responded by eliminating services and freezing salaries, although 8 percent said they were about to close their doors.

Right now the social safety net in the United States looks more like a basketball hoop. However, it’s not just services for the poor that have been cut; local arts organizations are struggling to put on the same high-quality shows and exhibits their patrons have come to enjoy over the years; educational institutions are feeling the pinch of reduced endowments to provide student scholarships and hospitals are reeling from a larger caseload of uninsured. Yet, how does an organization maintain high standards when a significant portion of its budget has been reduced? Like private-sector businesses, nonprofits these days have more difficulty accessing bank loans – a problem made worse by unreliable government contracts that were used as collateral in more stable times.

In San Diego, our need to give is exacerbated by the fact that we have far fewer private and corporate foundations contributing to nonprofits. It’s not that our local organizations aren’t generous – there simply aren’t enough of them. According to research we conducted on behalf of San Diego Grantmakers, foundation assets per San Diego nonprofit are lower than those in Phoenix, Denver, Pittsburgh, San Francisco and Los Angeles. In fact, San Francisco nonprofits have $13 for every $1 nonprofits have in our county.

Giving USA tells us that charitable giving by individuals comprises 75 percent of all donations received by nonprofits nationwide. That means that those checks we write are the backbone of the nonprofit sector.

This year has been tough on all of us. Even if you have a job, you may be the victim of a furlough, your pay may not have increased this year, or perhaps you’ve been lucky and gotten a small raise or bonus. Whatever your situation, we want to encourage you to reach deep into your pocket and give generously to nonprofits in our community. Our neighbors are counting on us.

Libby is the director of the University of San Diego’s Institute for Nonprofit Education and Research. Deitrick is director of the Caster Family Center for Nonprofit Research at USD.